The truth about 'benefit tourism'

Minus the spin, statistics show migrants place a less than proportionate burden on the welfare state and public services

'This new research should have been a great opportunity for ministers, without minimising the problems, to put some of the myths that surround this subject to rest' Photograph: Christopher Thomond/The Guardian

Friday 20 January 2012 12.30 EST
First published on Friday 20 January 2012 12.30 EST

I was early in the office today – 7.30am – and the cleaners were just finishing up. Not surprisingly, they clearly were not born in the UK, and I think it is reasonable to assume (we use a reputable firm) that they are paying tax and not claiming benefits. But of course anecdotal evidence of this sort proves nothing, so what are we to make of the Daily Telegraph article, by Chris Grayling and Damian Green, which states that 371,000 migrants are claiming out-of-work benefits?

There is some more detail in the BBC's report on the study. It says that 371,000 people, out of a total of 5.5 million, who are claiming working-age benefits, were non-UK nationals when they first registered for a national insurance number; of these 258,000 were from outside the European Economic Area (EEA). Of this latter group, 54% are now British nationals, so presumably the rest are not.

In itself, the 371,000 number tells us very little: is it large or small, or does it seem about right, whatever that means? For comparison, we can look at the Labour Force Survey. This says that, of the total number of people of working age (about 41 million), a little under 6 million were born abroad. Of these, a little under 4 million were born outside the EEA.

So, summing up these numbers in very rough percentages, we can say that migrants represent about 14% of all those of working age, only 7% of out-of-work claimants. In other words, migrants are about half as likely as non-migrants to be claiming out-of-work benefits. Much the same is true of people born outside the EEA (10% versus 5%).

This is hardly surprising, for structural and demographic reasons. Benefits come in two kinds: contributory benefits, and means-tested ones. It takes time to build up entitlement to contributory benefits like jobseeker's allowance, and to get means-tested benefits you usually need to establish permanent residency. Many migrants come here primarily to work, so are likely to be over-represented in the workforce relative to out-of-work benefits. And the age structure of the migrant population, and other demographic characteristics, probably make them less likely to claim benefits.

On fairness grounds too, this seems reasonable; we would hope and expect that migrants would be less dependent on the benefit system than people who'd lived here all their lives. But most people would probably agree that entitlement to contributory benefits should be based on national insurance contributions, rather than nationality, while, by and large, means-tested benefits should be reserved for long-term residents not short-term migrants. And that it is pretty much what this data suggests is happening.

This also appears to be true of public services more widely. NIESR research published last week, undertaken for the government's own migration advisory committee (MAC), looked at migrants' demands on education, health and social care services, and came to a very similar conclusion. We concluded that non-European economic and student migrants impose costs on these public services that are small both relative to the total cost of these services and to the share of these groups in the population as a whole.

So what have we learned? As a result of our research for the MAC and the government's own research, we now know that, looking at the main elements of state spending – benefits, health and education, migrants impose less than proportionate costs on the state. This is consistent both with common sense and previous research, but is now much more firmly established by hard evidence. Nobody's looked in detail at pensions yet, the last big chunk, but there is no doubt that, for the same reasons set out above, migrants are less likely to be claiming state pensions.

Of course that doesn't mean that there aren't cases of abuse, and that the government shouldn't tackle them. Indeed, the sort of complex data-matching exercise undertaken to establish these facts has dual benefits – it both improves policy making through better analysis, and helps eradicate fraud and abuse. In fact, the data suggests there isn't much actual fraud, with only 2% of the non-EEA claimants doing so illegally, less than one in a thousand of the overall caseload.

The only question that remains for me is why today's research was reported in the way it was. Public opinion surveys show that many people believe that migrants are a far greater burden on the benefit system and the welfare state than these figures suggest is actually the case. This undermines public confidence in both the immigration and the welfare systems. So this new research should have been a great opportunity for ministers, without minimising the problems, to put some of the myths that surround this subject to rest. They could have pointed out that migrants are less likely to claim benefits; that, to the extent they do, it's overwhelmingly because they are entitled to them, because they've paid into the system just like the rest of us, or because they've acquired citizenship or permanent residence; and they could have said that it's simply false to claim that migrants, overall, are a disproportionate burden on the welfare state or public services. Unfortunately, this is not the way it has been reported.

The BBC also needs to be more careful in its analysis. Its initial headline was "Benefits being claimed by more than 370,000 migrants"; as noted, a meaningless number, like all such numbers, out of context. I am pleased to see that they have now altered their story to give a much more accurate presentation, with the clear statement: "The estimates suggest workers born abroad are less likely to claim benefits than UK nationals." Let's hope next time they get it right from the start.